What. Is there some catch? Isn't this complicated? And don't those debit cards come with fees? Yes, yes, and yes. It does take a couple of steps, and those debit fees can add up to about 1%. But here are reasons why it might be worth your while:
- Earn a 1% spread: if you have a 2% cash back credit card like the Fidelity Amex or the Barclay Arrival, you can earn a 1% spread. Pay 1% to your grocer or drug store, get 2% back from your credit card company.
- Buy miles a 1 cent per mile: Practically any ol' credit card will give you one mile per dollar spent, so if you can redeem for value of upwards of 1 cent per mile (not hard to do if your dates are flexible), this is an opportunity to fly cheaply.
- Earn a 4% or greater spread: This is the real money. If you have a credit card that earns a 5x bonus on spending categories like groceries (the Amex Blue Cash Preferred, for example or the many Wells Fargo cards offering 5% cash back on groceries, drugstores, and gas) where gift cards are sold, you can earn an even bigger spread (4% back on whatever you spend, including your mortgage!)